Financial Health Snapshot
What does NiSource’s latest financial snapshot show?
Mixed. The strongest factor is regulated earnings growth, while the main concern is funding needs from capex-heavy investment.
For Q1 2026, NiSource’s latest snapshot is Mixed because the verdict blends growth, profitability, cash generation, balance-sheet capacity, and capital efficiency. For readers also tracking strategy, Mission Statement, Vision, & Core Values (2026) of NiSource Inc. (NI) helps connect those numbers to the company’s utility focus.
Revenue was $236B, operating income was $81920M, adjusted EPS was $106, and operating cash flow was $4423M versus $6864M in Q1 2025; capital expenditures were $8052M, so cash did not fully cover investment needs. The first metric to study more closely is free cash flow.
Utility earnings quality
Is NiSource revenue growth producing quality earnings?
Strong. The clearest confirmation is that revenue growth is matched by sharply higher operating income, net income, and diluted EPS in the latest supplied period; the main divergence is that the company-reported Q1 2026 GAAP net income of $5107M does not match the FMP line item, so definitions need to be reconciled.
Growth quantity matters less than growth quality here. Investors compare revenue durability with operating income, net income, and EPS across the same annual or quarterly periods because a regulated utility can post top-line growth without equally strong profit conversion. NiSource’s latest figures suggest earnings are keeping pace, which matters for a capital-intensive utility.
| Measure | Latest Period | Previous Period | Quality Test | Investor Meaning |
|---|---|---|---|---|
| Revenue | $236B, 2418%, 2026-03-31 | Previous comparable revenue not provided | Growth source is unclear in the supplied data | Repeatability is harder to judge without the prior comparable period and revenue bridge |
| Operating Income | $81920M in 2026-03-31 | Previous comparable value not provided | Growth was faster than revenue | Improving operating leverage supports stronger earnings quality |
| Net Income | $50710M in 2026-03-31 | Previous comparable value not provided | GAAP net income was separately reported as $5107M, so the line items do not reconcile cleanly | Final earnings still point to strong profit conversion, but definitions matter |
| Diluted EPS | $106 in 2026-03-31 | Previous comparable diluted EPS not provided | Share-count effect cannot be verified from the supplied data | Per-share results show shareholders captured the earnings growth shown by the business |
How durable is NiSource revenue?
The strongest durability signal is recurring utility demand from about 33M natural gas customers and 500K electric customers. The biggest visibility limit is customer and contract concentration, especially around large-load demand tied to Alphabet Inc., Amazon, and the GenCo model.
- Demand Quality: Recurring regulated customer demand is usually visible and repeatable, but large-load demand can add concentration risk.
- Pricing and Volume: The price-volume split is unavailable; the supplied data do not separate tariff changes, volumes, or mix.
- Diversification: Customer segments span gas and electric service, but exact revenue contributions from Alphabet and Amazon remain partly confidential.
That mix makes profitability and cash conversion the next question, especially in a capital-heavy utility model. See NiSource Inc. (NI): History, Ownership, Mission, How It Works & Makes Money for the business model context.
Profitability and cash quality
How well does NiSource convert profit into cash?
NiSource showed strong reported profitability, but cash conversion was weaker because operating cash flow fell to $4423M in Q1 2026 while capital spending stayed heavy. The profit line was still supported by operating cash, but free cash flow remained under pressure.
NiSource’s gross, operating, and net margins need to be read separately from net income because utilities can report solid earnings while still spending heavily on the grid. In Q1 2026, regulated recovery and pricing helped support results, including the Columbia Gas of Pennsylvania $556M revenue increase. For ownership context, see Exploring NiSource Inc. (NI) Investor Profile: Who's Buying and Why?
| Measure | Latest Period | Previous Period | Verified Driver | Investor Meaning |
|---|---|---|---|---|
| Gross Margin | 59.7% (Q1 2026) | Not supplied | Gross profit after fuel and service costs reflected regulated pricing and recovery. | Shows the core economics before operating overhead. |
| Operating Margin | 34.7% (Q1 2026) | Not supplied | Operating income after $58640M of operating expenses. | Suggests scale helps, but overhead still matters. |
| Net Margin | 21.5% (Q1 2026) | Not supplied | Interest expense of $19160M and income tax expense of $8580M reduced earnings after operations. | Shows final profit still depends on financing and tax costs. |
| Operating Cash Flow | $4423M (Q1 2026) | $6864M (Q1 2025) | Lower cash generation versus reported net income, with depreciation and amortization of $28830M cushioning the earnings-to-cash gap. | Earnings converted to cash, but not as fully as investors would want. |
| Free Cash Flow | Free Cash Flow Growth: -17143% (Q1 2026) | Not supplied | Capital expenditures of $8052M consumed cash after operations. | Reinvestment needs left less room for debt reduction or payouts. |
What most affects NiSource's cash conversion?
Heavy capital spending is the biggest drag. Q1 2026 operating cash flow was $4423M, but capital expenditures of $8052M and recent debt issuance limited the cash left after investment.
- Main Driver: Capital spending is the main pressure point, and it looks structural because regulated utilities keep investing in infrastructure.
- Evidence Gap: The supplied data does not break out working-capital changes, so cash timing effects are unclear.
- Metric to Monitor: Watch operating cash flow and capital expenditures versus net income.
Mixed Liquidity
Can NiSource’s balance sheet support its investment plan?
Mixed. NiSource’s regulated utility asset base and 161% FY 2025 FFO/Debt ratio support the balance sheet, but heavy leverage and the need to refinance funding for the $210B base plan and $280B total consolidated plan are the main concerns.
Cash alone does not tell the full story for NiSource. Investors should look at working capital, asset quality, debt service, solvency, liquidity, and refinancing together. The company’s regulated asset base and access to capital matter more than market value, so balance-sheet strength depends on recovery through rates and steady financing access. The Mission Statement, Vision, & Core Values (2026) of NiSource Inc. (NI) also help frame that regulated investment focus.
| Area | Latest Evidence | Assessment | Investor Meaning |
|---|---|---|---|
| Cash and Working Capital | December 31, 2025 cash and cash equivalents were $7190M; commercial paper was $129B. | Mixed | Near-term obligations appear manageable, but liquidity still depends on ongoing market access. |
| Total and Net Debt | December 31, 2025 long-term debt was $1548B; 2026-03-31 total debt was $1677B. | Mixed | Leverage is high, so flexibility is constrained even with a regulated asset base. |
| Debt Service and Refinancing | FY 2025 FFO/Debt Ratio was 161%, above the 140%–160% target range; on May 18, 2026 NiSource issued $125B of debt, including $5000M of 475% Notes due 2031 and $7500M of 530% Notes due 2036. | Mixed | Debt service looks supported, but refinancing access is important because capital spending is large. |
| Asset Quality | December 31, 2025 total assets were $3022B and net property, plant, and equipment was $2943B. | Strong | The asset base is large, regulated, and capital intensive, which supports recovery and financing. |
| Liabilities and Equity | The balance sheet is built around regulated utility assets rather than market capitalization; book equity and liabilities must be judged against rate recovery and investment needs. | Mixed | Equity provides a buffer, but liabilities remain heavy relative to the funding plan. |
What balance-sheet risk matters most for NiSource?
Refinancing risk matters most. The company can fund investment only if it keeps access to debt markets while preserving its 161% FFO/Debt support and regulatory recovery.
- Current Exposure: Total debt was $1677B on 2026-03-31, while cash and cash equivalents were $7190M.
- Protection: FY 2025 FFO/Debt Ratio of 161% and a $2943B net property base support credit quality.
- Warning Signal: Watch cash balances, debt spreads, and whether commercial paper use stays temporary.
Capital Efficiency
Are NiSource’s returns keeping pace with reinvestment needs?
Mixed. NiSource’s capital plan points to strong regulated growth, but internal cash does not appear sufficient on its own for the reinvestment load, so the company still looks dependent on outside funding and rate recovery timing.
For regulated utilities, returns have to be read alongside leverage, asset intensity, capital spending, working capital, and the timing of cost recovery. NiSource’s earnings can improve as approved rate base grows, but cash often goes out before regulators or customers fully pay it back, which makes funding structure just as important as reported profit.
| Capital Measure | Latest Evidence | Quality Test | Investor Meaning |
|---|---|---|---|
| ROIC | Unavailable in the supplied data; NiSource’s NiSource Inc. (NI): History, Ownership, Mission, How It Works & Makes Money profile should be read with its Q1 2026 Capital Expenditures: $8052M and the $210B base investments through 2030, part of a $280B total consolidated plan. | ROIC means return on capital used in operations; regulated earnings can support it if margins, rate base growth, and allowed returns keep up with heavy investment. | If operating value rises faster than invested capital, the company is creating value; if not, capital intensity can compress returns. |
| ROE and ROA | ROE and ROA were not supplied. ROE is return on shareholder equity; ROA is return on assets. | ROE can look stronger when leverage is high, while ROA can stay modest in asset-heavy utilities even when equity returns are acceptable. | These measures show whether shareholder returns are being driven by real operating strength or by balance sheet leverage. |
| Maintenance and Growth Investment | NiSource is targeting consolidated rate base growth of 90%–110% annually through 2033 and a 2026–2033 non-GAAP consolidated adjusted EPS CAGR target of 90%–100%. GenCo is part of the reinvestment test, with NIPSCO and GenCo fixed-price energy storage agreements totaling $6587M, battery supply commitments of $1227M, capacity purchase agreements for 2028–2030 of $1746M, and a pending $11B capacity deal through 2040. | The scale of committed spending and contracted load support suggests growth investment is a major driver, not just maintenance capex. | These commitments matter because they can make growth pay for growth and reduce the risk that large-load development costs fall on retail customers. |
| Internal Funding Capacity | Supplied data point to a heavy funding need, but operating cash flow, free cash flow, debt, and dilution details were not provided. | Based on the capital plan alone, investment looks partly externally funded rather than fully self-funded. | That raises the importance of debt capacity, rate recovery timing, and dilution risk as monitoring topics for shareholders. |
Are NiSource’s returns on capital sustainable?
Mostly yes if regulated rate-base growth and GenCo contracts hold up, but sustainability weakens if capital spending outruns rate recovery, debt rises too fast, or the large-load projects fail to convert into contracted earnings.
- Operating Source: Regulated rate-base growth, supported by approved utility margins and contracted GenCo demand.
- Funding Requirement: The $280B total consolidated plan and the $210B base investments through 2030.
- Durability Test: Returns weaken if ROIC stays below the earnings support from the capital plan or if cash flow cannot cover capex without more external funding.
Financial Resilience
How resilient is NiSource, and which warning signs matter most?
NiSource is Strong, mainly because regulated utility demand and rate-base investment support cash generation over time. The most important verified warning sign is weaker cash conversion: Q1 2026 Operating Cash Flow of $4423M fell from $6864M in Q1 2025 while capital spending stayed heavy.
NiSource can still fund essential investment, but the cushion is thinner when cash flow lags capex and external funding rises. That matters for debt service and liquidity, even with regulated demand and customer agreements. For related investor context, see Exploring NiSource Inc. (NI) Investor Profile: Who's Buying and Why?
| Pressure | Financial Effect | Existing Protection | Warning Signal |
|---|---|---|---|
| Revenue or Margin Pressure | Lower operating leverage would weaken earnings, reduce cash flow, and limit debt capacity if regulated recovery slows. | Recurring regulated utility demand, rate-base investment, and visible customer agreements help support stability. | Sustained declines in revenue, margins, or operating cash flow would confirm deterioration. |
| Working-Capital or Investment Pressure | $8052M in Q1 2026 capital expenditures can absorb cash and increase reliance on external funding. | Internal funding is supported by regulated operations and ongoing investment programs. | Weak operating cash flow or rising asset growth that outpaces cash generation would be a concern. |
| Interest or Refinancing Pressure | $1548B in long-term debt, $129M in commercial paper, $1677B total debt, and $19160M in interest expense can tighten flexibility if rates stay high. | FY 2025 FFO/Debt Ratio of 161% was above the target range of 140%–160%, and $125B debt financing on May 18, 2026 adds liquidity support. | Rising debt, higher interest expense, or weaker FFO-to-debt would signal mounting pressure. |
Which financial warning signs should investors monitor at NiSource?
The top signals are operating cash flow, FFO-to-debt, and debt maturities. The first two are confirmed pressure points today; regulatory timing risk is more of a future risk unless Pennsylvania or federal actions start delaying recovery.
Cash flow lag versus capital spending
Q1 2026 operating cash flow fell to $4423M while capex reached $8052M. That gap raises external funding dependence. Monitor operating cash flow to see whether utility earnings and collections recover.
Debt load and refinancing needs
Long-term debt of $1548B, commercial paper of $129M, and total debt of $1677B keep interest pressure relevant. The $125B financing helps, but FFO-to-debt is the key next metric to watch.
Regulatory timing uncertainty
Pennsylvania scrutiny, federal coal-retirement mandates, and the order keeping Schahfer coal units online for grid reliability could delay operating decisions and raise compliance risk. The approved GenCo declination filing helps, but timing remains important.
Financial Health Scorecard
What does NiSource’s financial health mean for investors?
NiSource gets a Mixed to Strong scorecard. The strongest factor is recurring regulated earnings, while the weakest is cash conversion after capex. The most important investment condition is whether utility growth can keep funding debt-heavy reinvestment without straining liquidity.
| Financial Factor | Rating | Evidence and Investor Meaning |
|---|---|---|
| Revenue and Earnings Quality | Strong | Q1 2026 Operating Revenue: $236B and Adjusted EPS: $106 reflect regulated customer demand and better per-share earnings conversion. |
| Profitability and Cash | Mixed | Operating Income: $81920M and Net Income: $50710M improved, but Q1 2026 Operating Cash Flow: $4423M fell from $6864M in Q1 2025 after $8052M of capex. |
| Balance Sheet and Liquidity | Mixed | Large regulated assets support access, but Long-Term Debt: $1548B, commercial paper: $129B, and Total Debt: $1677B mean NiSource needs steady market access. |
| Capital Efficiency | Mixed | Rate base growth and GenCo support reinvestment, but verified ROIC, ROE, and ROA figures are not supplied, so efficiency is harder to judge. |
| Financial Resilience | Strong | FY 2025 FFO/Debt Ratio: 161% exceeded the 140%–160% target range, and the fully regulated model helps absorb pressure. |
- What Supports the Thesis: Recurring regulated earnings, Mission Statement, Vision, & Core Values (2026) of NiSource Inc. (NI), and utility growth through base investments and large-load contracts.
- What Challenges the Thesis: Debt-funded reinvestment plus weaker operating cash flow after heavy capex increases dependence on continued financing access.
- What to Monitor: operating cash flow, FFO-to-debt, long-term debt
These factors shape forecast scenarios, stress testing, and valuation assumptions by showing how much growth NiSource can fund while keeping leverage and cash flow within acceptable ranges.
FAQ
What Do Investors Ask About 's Financial Health?
Investors most often ask about the company's revenue quality, profitability, cash generation, debt, liquidity, capital efficiency, and ability to withstand financial pressure.
What does NiSource's FFO-to-debt ratio signal?
FY 2025 FFO/Debt Ratio: 161% exceeded the target range of 140%–160%, which supports credit capacity for a regulated utility Investors should still monitor whether future debt funding and capex pressure keep this ratio within management’s intended range
Why is commercial paper important for NiSource liquidity?
Commercial paper: $129B gives NiSource short-term funding flexibility, which matters because utility cash needs can rise before regulatory recovery is collected It should be monitored as liquidity support, not as a substitute for long-term capital
How does GenCo affect retail customer cost exposure?
GenCo is designed to build and manage generation capacity for large-load data center customers NiSource says collaborations with Alphabet and Amazon are projected to deliver approximately $14B in total savings to existing retail customers over the contract lives
What makes NiSource's cash conversion look pressured?
Q1 2026 Operating Cash Flow: $4423M decreased from $6864M in Q1 2025, while Q1 2026 Capital Expenditures were $8052M That gap means earnings strength did not fully fund the investment program internally
Which debt maturities should NiSource investors watch?
The May 18, 2026 financing added $5000M of 475% Notes due 2031 and $7500M of 530% Notes due 2036 Investors should watch refinancing costs, total debt, and whether regulated cash flow keeps pace with interest expense